Healthcare costs in the US have risen by 1,589 dollars over five years, reaching an average of 9,195 dollars per person in 2023. This marks an increase of 20.9% since 2019.
But despite the rise in medical expenses, the financial burden on many households has slightly eased. Americans spent 13% of their salary on healthcare in 2023, compared to 14% in 2019. This shift reflects the fact that wage growth has outpaced healthcare cost increases in most states.
A new study by Steno Health examined healthcare spending and income data from 2019 to 2023. During this period, the typical salary grew by 24.9%, from 55,567 dollars to 69,418 dollars. The study shows that the percentage of income spent on healthcare fell in many regions. The largest improvements were seen in South Dakota, where the burden dropped from 19% to 16%, and in Idaho, Montana, Washington, and New Hampshire, each with a two-percentage point decrease.
Kentucky and Louisiana were the only states where the financial burden increased. Kentucky residents now spend 17% of their 55,063 dollar annual salary on healthcare, an increase from 16% in 2019. In Louisiana, the share rose from 15% to 16%, with residents earning an average of 58,661 dollars and spending 9,576 dollars on healthcare per year.
Alex Milani, medical director at Steno Health, commented on the findings. “The data shows a surprising bright spot in healthcare affordability. Though medical costs keep climbing, they’re taking a smaller bite out of the average pay check.”
State-level comparisons reveal sharp contrasts in both cost and burden. West Virginia leads the nation in healthcare spending, with residents allocating 21% of their 52,813 dollar annual income to healthcare, totalling 11,089 dollars. This percentage is unchanged since 2019. Alaska follows, where 18% of the average 71,309 dollar salary goes toward healthcare, amounting to 13,015 dollars. Delaware, Kentucky, and Indiana each report a 17% burden.
Conversely, western states report lower percentages. Utah, Washington, and Nevada all show 11% of income going to healthcare. Utah has the lowest expenses at 6,833 dollars, followed by Nevada at 7,198 dollars and Washington at 9,013 dollars.
The study also tracked the percentage increase in healthcare costs over the five-year period. Louisiana saw the largest jump at 38.2%, followed by Kentucky at 35.4%. These were the only two states where healthcare became more expensive relative to income. New Hampshire recorded the smallest increase at 5.4%, with Idaho and Washington close behind at 10.8% and 10.9% respectively.
In terms of absolute healthcare spending, Alaska has the highest annual cost at 13,015 dollars, followed by South Dakota at 11,511 dollars, Massachusetts at 11,354 dollars, and New York at 11,343 dollars.
Milani offered further insight into the state-level differences. “These state-level differences highlight the complex factors affecting healthcare affordability. While most Americans are experiencing some relief as their wages grow faster than healthcare costs, families in Kentucky and Louisiana are moving in the opposite direction.”
“Looking at the data by region, we can also see that the Northeast has the highest absolute healthcare costs, but the South has the highest costs relative to income. This creates different types of financial pressure depending on where families live.”
“It’s also interesting to note that some states have high healthcare costs but not the highest increases. South Dakota, for instance, currently has the highest per-person spending at 11,511 dollars in the ranking, yet places among the states with the lowest percentage increase over the five-year period.”
Milani concluded, “Despite some regional trends, the data also shows that healthcare cost growth does not always follow a geographic pattern. Washington and Idaho, both in the Far West, saw some of the lowest cost growth nationally, while Louisiana and Kentucky, also located in high-growth regions, experienced exceptionally sharp increases. This means that state-level dynamics, such as policy decisions, demographics, and healthcare infrastructure, play a decisive role in shaping cost trends across America.”
The study used healthcare cost and income data from the Bureau of Economic Analysis. It calculated the percentage of income spent on healthcare in both 2019 and 2023, and measured the change over this five-year span.
